The Clock Is Ticking at CIGS Solar Firm Nanosolar

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Earlier this year Nanosolar went through a round of layoffs. Our sources claimed 75 percent of the staff was let go with 60 days' pay. Here's a California WARN notice showing all 170 employees to be lost on April 15.

We spoke with two sources close to the company under conditions of anonymity. There are 40 to 50 people still remaining at the firm while investors and management seek a buyer. Like Solibro, MiaSolé (acquired by Hanergy), HelioVolt or Ascent, Nanosolar is looking for an Asian manufacturing savior to provide patient capital. According to our sources, there have been a number of visits and tours from potential buyers -- although it's not going as well as hoped.

All of the remaining employees at Nanosolar have been encouraged to look for other employment by the CEO and management.

Aeris Capital, the current majority shareholder, made this decision amidst a savage solar market and a process that was never brought under control for volume production.

Nanosolar prints CIGS inks on aluminum foil in a roll-to-roll process without using high-vacuum manufacturing equipment. It has always been a technology with promise, but Nanosolar, founded in 2002, has tended to underachieve. The extremely well-funded startup has had a history of technical and commercial promises, but was light on meeting milestones and roadmaps.

The metal-wrap through (MWT) architecture chosen by Nanosolar is thought by some to be overcomplicated and unsuitable for low-cost production. Sources close to the company suggest that Nanosolar effectively jumped from prototype to production without sufficient reliability testing or dialing in the process.

Nanosolar produced a total of less than 50 megawatts since its founding in 2002, despite having raised more than $400 million from a long list of investors including Benchmark Capital, EDF Group, Firelake Capital Management, GLG Partners, Grazia Equity, Lone Pine Capital, Mitsui & Co., Riverstone Holdings, SAC Capital, Swiss Re and U.S. Venture Partners.

The only investors ever to make money in CIGS are USVP and Garage Ventures. USVP sold its shares in Nanosolar and exited at a small multiple in 2005, according to Nanosolar's founding CEO Martin Roscheisen. Garage Ventures "sold a big chunk of stock in the third round," when MiaSolé stock had a valuation of $400 million, according to Bill Reichert, a partner at the VC firm. MiaSolé was sold for $30 million.

Martin Roscheisen was the Nanosolar's founding CEO through 2010. Geoff Tate was CEO for about two years, replaced by Eugenia Corrales, who in turn was replaced by Karl Steigele.